HONOLULU — A federal appeals court ruling on New Year's Eve barred Hawaii from enforcing the law. tourism tax on climate change for cruise ship passengers – a fee that was supposed to come into force at the beginning of 2026.
The Cruise Lines International Association challenged the tax in a lawsuit, arguing that the new law violates the U.S. Constitution by taxing cruise ships for calling at Hawaiian ports. They also argued that it would make cruises more expensive. The lawsuit notes that the law allows counties to charge an additional surcharge of 3%, bringing the total to 14% of the prorated fare.
The levy raises the stakes hotel room and vacation rental but also imposes a new tax of 11% on the gross fare paid by a cruise ship passenger, proportional to the number of days the ships stay in Hawaiian ports. The lawsuit notes that the law allows counties to charge an additional surcharge of 3%, bringing the total to 14% of the prorated fare.
This is the first such collection in the country, designed to help cope with planet warmingHawaii Governor Josh Green signed legislation in May which increases tax revenue to combat coastline erosion, forest fires and other climate problems. Officials estimate the tax will generate about $100 million a year.
U.S. District Judge Jill A. Otake upheld the law last week, and the plaintiffs appealed to the 9th U.S. Circuit Court of Appeals. The US government intervened in the case and also appealed Otake's decision.
The ruling by two 9th Circuit judges granted both requests for injunctive relief pending appeals.
“We remain confident that Act 96 is lawful and will be upheld when the merits of the appeal are heard,” Toni Schwartz, a spokeswoman for the Hawaii Attorney General’s Office, said in an email.
The order temporarily halts enforcement of the cruise ship law while the appeal process continues, her email said.
The lawsuit only challenged provisions of the cruise ship law.
Cruise Lines International Association spokesman Jim McCarthy said he was not sure he would be able to get comment from the plaintiffs given the timing of the ruling before the holiday.
